Executive Profile Series with Anna Kovaleva from Yandex.Money

Yandex is often said to be the ‘Google of Russia’ not just because it is the Russia’s leading search engine with the biggest market share but also because it has been building out a whole range of different services around its initial premise. They include email, maps, taxi hailing app, online storage, navigation, online film database, online payments and many others helping people solve their everyday problems.

Yandex.Money, first designed as a single e-wallet, has now transformed into Russia’s largest online payment service with its own ecosystem of millions of users and thousands of merchants. PaymentsJournal sat down with Anna Kovaleva, Head of Foreign Communications at Yandex.Money to discuss its latest innovations and current industry trends.

PJ: Anna, could you tell us what is Yandex.Money today? How big is your audience?

AK: Launched in 2002, first designed as one of Yandex services, Yandex.Money has grown into a large independent company with a range of services. Today we are Russia’s biggest online payment service. We work with two types of clients – individual users and merchants – those, who pay and those, who accept payments for their goods and services. Our b2b service Yandex.Checkout is now the largest payment service provider in Russia, according to a 2016 survey by MARC. With this payment solution, merchants from all over the world can offer Russian consumers the online payment methods most popular among Russians and CIS-citizens just in one button ‘Pay with Yandex’. Currently, more than 76,000 online stores across the globe use Yandex.Checkout and it processes up to 600 payments per second.

PJ: Could you share any examples of your recent innovations?

AK: This November Apple Pay came to Russia. We were among the first to bring Apple Pay to the market. At Yandex.Money we are always trying to make innovative payment technology accessible to all users regardless of the bank they use. In fact, our users don’t have to be clients of a bank at all — all they have to do is open an e-wallet with Yandex.Money and add a virtual MasterCard. Issuing a virtual card is very easy and can be done online using the Yandex.Money mobile app. Yandex.Money users can pay via Apple Pay by adding their plastic or virtual prepaid Yandex.Money cards to Apple Wallet. This can be done from either the Apple Wallet app or Yandex.Money mobile app for iOS.

PJ: Was it easy to make people adopt a new technology?

AK: Contactless payments are quickly gaining popularity among Russian users. Nowadays people can pay contactless everywhere – in brick-and-mortar stores, restaurants, public transport and even at petrol stations. Russians are well aware of this technology.

According to latest Yandex.Money stats, 35% of all our mobile audience pay contactless. Interestingly, 67% of our e-wallet users, who paid contactless, opted for a virtual Yandex.Money MasterCard. As to figures, Yandex.Money has issued more than 500,000 plastic cards and 11 million virtual MasterCards.

PJ: Do you have anything for merchants willing to embrace the trend?

AK: You are right – contactless payments on websites and in apps can indeed become an additional pretext for a spontaneous purchase and many merchants know that. We recently implemented a new feature for merchants – payment via Apple Pay for Yandex.Checkout clients. Online stores and other merchants, which accept payments via Yandex.Checkout can now offer consumers fast and convenient contactless payment via Apple Pay. Our clients can add a new payment method in apps and on websites. Online shopping has never been easier: paying via Apple Pay is as simple as the touch of a finger. Touch ID enables frictionless credit card payments and eliminates the need to manually type card or shipping details.

PJ: Is this new feature in demand? Any examples of those services who decided to go for it?

AK: Apple Pay was first introduced in November 2016. Since December 2016 Yandex.Checkout has been providing payments via Apple Pay in various Yandex apps – Yandex.Taxi, a handy app to order a cab; Kinopoisk, an online film database known as ‘the IMDb of Russia’, and Yandex.Fines, which is used for tracking and paying traffic fines. More than 2000 Yandex.Checkout clients have already expressed interest in adding Apple Pay as a payment option. The new payment option is very appreciated by those companies, who put an emphasis on easy and fast payment process. Everything is very simple: one touch of a finger on your smartphone – and you are all set.

PJ: Yandeх.Money is sometimes referred to as the ‘Russian PayPal’. Are you focused on local merchants or working on a global scale?

AK: We work on a global scale and are happy to guide international partners throughout their journey on the Russian market. We have a lot of international partners in China, US and Europe, including AliExpress, JD.Com, LeEco, Next, Blablacar, Renault and many others. In the case of BlaBlaCar we teamed up with this global ridesharing service in order to enable Russian clients to book a car ride online. Our partnership with Renault is brand new. This is the first case on Russian market when customers can book cars and make prepayment online via the store website.

PJ: How do you see the future of the automobile industry coming online?

AK: Russians are already used to online shopping, they no longer fear buying expensive things via the Internet. Online car purchase is still regarded as a new service for the Russian market, however it has a promising potential. We believe that the case of such a successful automobile manufacturer as Renault is a great example for the whole market, which will eventually speed up the process of other automobile companies coming online.

PJ: What other industries are you aiming at?

AK: One of the most interesting areas for our business development is digital distribution. There are many companies producing or selling digital content only: online games, films, music, books, software. They obviously face limitations when it comes to looking for and reaching their audience: customers may come to their websites, spend money on gift cards or top up their balance. There are additional channels of selling digital content. For instance, people can do it via Yandex.Money website. People can initially come to our website for paying utility bills and end up topping their online games balance. Additional distribution channels help companies to significantly enlarge their dedicated audience and eventually increase the sales. We can provide merchants with these distribution channels: via our website, apps, payments from search page, our partners’ chains and online banking interface.

PJ: What customer behavior trends do you see?

AK: People in Russia are very used to online payments – 92% of Russian Internet users opt for paying online. Online payments are quickly becoming even more popular, in particular, we witness the rise in mobile payments. Smartphones are everywhere, they are everything for humans. You cannot go anywhere without your mobile. At first, it was easy to use mobile to search for comprehensive answers to users’ questions, and then it turned out that mobile can be used for buying almost everything at the exact moment of your thought. According to Yandex.Checkout latest stats, this year there was a significant rise in mobile payments – the figure increased by two times, mobile payments share now comprises 20% of the total Yandex.Money turnover.

PJ: Do you think people’s payment behavior will stay the same or will payment habits evolve in the future?

AK: We are living in the data age – not simply because of the increasingly important role that technology is playing in our lives, but also because of the vast amounts of information being collated about our habits by gadgets. Smartphones may play a very important role in defining people’s payment behavior in the future. In addition to automatic payments based on calendar or low balance, smartphones may also compare prices and suggest the best offer based on price, route and geo data. These smart systems will require users to take fewer actions when making everyday life payments—they only have to push “yes” to a suggested payment. As a result, smartphones will be much more than just gadgets, eventually playing a role of a human consultant.

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